S$8 billion in continued Covid-19 support, including extension of Jobs Support Scheme

A FURTHER S$8 billion in continued Covid-19 support is on the way, including up to seven more months of wage subsidies; a new S$1 billion Jobs Growth Incentive (see Amendment Note) for sectors that are still hiring; and an extended grant for Singaporeans who are unemployed or have seen significant income loss.

The S$8 billion amount will be funded by reallocating monies from other areas, such as development expenditures delayed due to the pandemic, with no plans to draw on past reserves beyond what was approved earlier, said Deputy Prime Minister and Finance Minister Heng Swee Keat in a ministerial statement that was broadcast on Monday afternoon.

Hard-hit sectors will get extra support, including another S$187 million to extend the Enhanced Aviation Support Package up to March 2021.

With the pandemic under control in Singapore but raging on elsewhere, government support measures are being adjusted as the crisis progresses, said Mr Heng. Since the Fortitude Budget in May -- an unprecedented fourth Budget in one year -- the pandemic has continued to spread in many countries, with a correspondingly grim economic impact.

Singapore's Covid-19 situation is now under control, with the multi-ministry taskforce working towards resuming more activities safely and sustainably, said Mr Heng. But the global economy remains very weak, and Singapore must stay vigilant, with safe management measures and restrictions on international travel to continue "for some time".

"Together, we must continue to adapt to the rapidly changing situation," he said.

First, the government will continue to support jobs and create new ones. The Jobs Support Scheme wage subsidy will be extended by up to seven months, covering wages paid till March 2021, with support levels and duration varying by sector.

Getting the most aid are firms in aerospace, aviation, and tourism, which will get support at the 50 per cent level. The arts and entertainment, food services, land transport, marine and offshore, and retail sectors will get 30 per cent support, and most other sectors, 10 per cent support.

For growing sectors that are still hiring, including biomedical sciences, financial services, information and communications technology, public healthcare, and long-term care, the new S$1 billion Jobs Growth Initiative will support firms to increase their local headcount over the next six months.

Subject to a cap, the government will co-pay up to 25 per cent of salaries of new local hires for a year, or up to 50 per cent for those aged 40 and above. The Ministry of Manpower will provide details later this month.

The Covid-19 Support Grant, introduced in May for Singaporeans who are unemployed or have suffered significant income loss, will also be extended till December 2020. More details will come in early September.

With the labour market likely to stay weak beyond 2020, the government is studying how to continue supporting employees and self-employed persons who are most vulnerable, said Mr Heng. More workers will also be made eligible for the earlier-announced S$3,000 Workfare Special Payment.

A second part of the government's strategy is to support the hardest-hit sectors of aerospace, aviation, and tourism so they can retain core capabilities and prepare for eventual recovery, said Mr Heng.

Another S$187 million will go towards extending the Enhanced Aviation Support Package till March 2021, provide cost relief for airlines, ground handlers, cargo agents, and airport tenants.

The temporary redeployment programme for aviation sector workers will be scaled up, with some 4,000 new jobs in the healthcare sector alone, including permanent roles.

And to boost domestic tourism, S$320 million has been set aside for tourism credits for Singaporeans, dubbed SingapoRediscovers Vouchers, with details to come in September.

Mr Heng added that he was prepared to provide more support for the sectors of arts and culture, and sports, in consultation with the Ministry of Culture, Community and Youth. For the small number of firms that may be unable to open soon, such as those in the nightlife industry, the government "will help them transition to other activities or ease their exit", with details to come from the Ministry of Trade and Industry (MTI).

Third, Singapore must position itself to seize growth opportunities in a post-Covid-19 world, said Mr Heng, noting that the February Budget had S$8.3 billion over three years to support transformation and growth. To enhance the Startup SG Founder programme, up to S$150 million will be set aside in phases (see Amendment Note), with MTI to give details later this week, he said.

The Emerging Stronger Taskforce has also been consulting widely and is in the midst of a three-month sprint to prototype new ideas in areas such as smart commerce and supply chain digitalisation.

"Working together with our businesses, we will capture new opportunities, create better jobs, and reimagine our economy, so that we can emerge stronger from the crisis," he concluded.

According to an interim update on the government's current financial year, both operating revenue and total expenditure are now expected to be lower, with the overall balance shifting only slightly. The revised overall budget balance for FY2020 is projected to be a deficit of S$74.2 billion, up S$0.1 billion from the S$74.3 billion deficit projected at the Fortitude Budget in May.

Operating revenue is projected to be S$63.7 billion, down S$5.1 billion or 7.4 per cent from the May estimate, due to lower economic activity.

Total expenditure is projected to be S$102.1 billion, down S$8.4 billion or 7.6 per cent from the May figure. Operating expenditure is lower due mainly to lower military expenditure with Covid-19-related delays and cancellations, while development expenditure is lower due to delays in major construction projects.

Amendment note: An earlier version of this article listed several sectors associated with the new Jobs Growth Incentive. The Ministry of Finance has clarified that the incentive is for all firms that can increase their local headcount, regardless of sector. The MOF also clarified that the S$150 million meant for enhancing the Startup SG Founder programme will be set aside in phases.The article has been amended to reflect the changes.